SHRI MAHENDER JAKHAR,JODHPUR vs. ITO, WARD-3(1), JODHPUR

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 745/Jodh/2025 (Assessment Year – 2017-18) Shri Mahender Jakhar Income Tax Officer, Ward 3(1) Plot No. 7, Abhaygarh Scheme, Jodhpur Opp. KV No. 1 Airforce Area, Jodhpur-342001 PAN No. AKAPJ 8097 L Assessee by Shri Rajendra Jain, Advocate and Smt. Raksha Birla, CA (Physical) Revenue by Shri Bhawani Shankar Mathur, DCIT-DR (Virtual) Date of Hearing 19 / 05 / 2026. Date of Pronouncement 29 / 07 / 2026. ORDER PER: SUDHIR PAREEK, J.M. The aforetitled appeal has been preferred by the assessee/appellant against the order dated 06.08.2025 u/s 143(3) of the Income Tax Act, 1961 (in short referred as ‘the Act’) passed by Income Tax Officer, Jodhpur [for the sake of convenience, hereinafter referred to as CIT(A)] by which appeal filed by the assessee was dismissed. 2. The assessee has raised following grounds of appeal: 1. That on the facts and in the circumstances of the case the Id CIT(A) grossly erred in upholding the validity & legality of assessment order passed by Ld AO.

2 ITA No. 745/Jodh/2025 Asst. Year: 2017-18 2. That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in upholding the cash found by police authority is belonging to appellant without analyzing the legal evidences and explanation submitted by appellant in right perspective and judicious manner. 3. That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in sustaining the addition of Rs. 35,30,000/- on account of cash found & seized unexplained money u/s 69A of the Act. as 4. That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in upholding the provision of sec 69A of the Act particularly the appellant is not the real owner of such cash found & received on behalf of farmers against the adhat sales and only earned the commission income. 5. That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in not appreciating the truce facts supported from affidavit of farmers in right perspective and judicious manner and without bringing on record any adverse material or evidence had presumed the same as afterthought only on the basis of assumption & presumption. 6. That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in violating the principle of nature justice while upholding the statement of third party used against the appellant without providing the opportunity of cross-examination of same. 7. That on the facts and in the circumstances of the case the Ld CIT(A) grossly erred in making the arbitrary & illegal allegations which are contrary to legal & credible evidences on record and also unsustainable in eye of law. 8. That the petitioner may kindly be permitted to raise any additional or alternative grounds at or before the time of hearing. 9. The petitioner prays for justice & relief.

3 ITA No. 745/Jodh/2025 Asst. Year: 2017-18 purely mechanical in manner and without application of mind and when such approval is non-est in the eye of law, deserves to be quashed entire assessment itself. 4. On the other hand, Ld. DR relied on the impugned order. From the bare perusal of record, we find that by order dated 27th 5. December, 2018 (which is well placed at Pg. No. 16 of paper book) in which approval in question accorded u/s 153D of the Act. For ready reference, we may reproduce the approval u/s 153D of the Act which reads as under:

4 ITA No. 745/Jodh/2025 Asst. Year: 2017-18 6. In the case of ACIT, Circle 1(2) Vs. Serajuddin & Co., Hon’ble the Orissa High Court at Cuttack in ITA Nos. 39 to 45 of 2022 dated 15.03.2023 has observed as under: “As rightly pointed out by learned counsel for the Assessee there is not even a token mention of the draft orders having been perused by the Additional CIT. The letter simply grants an approval. In other words, even the bare minimum requirement of the approving authority having to indicate what the thought process involved was is missing in the aforementioned approval order. While elaborate reasons need not be given, there has to be some indication that the approving authority has examined the draft orders and finds that it meets the requirement of the law. As explained in the above cases, the mere repeating of the words of the statute, or mere "rubber stamping" of the letter seeking sanction by using similar words like 'see' or 'approved' will not satisfy the requirement of the law. This is where the Technical Manual of Office Procedure becomes important. Although, it was in the context of Section 158BG of the Act, it would equally apply to Section 153D of the Act. There are three or four requirements that are mandated therein, (i) the AO should submit the draft assessment order "well in time". Here it was submitted just two days prior to the deadline thereby putting the approving authority under great pressure and not giving him sufficient time to apply his mind; (ii) the final approval must be in writing; (iii) The fact that approval has been obtained, should be mentioned in the body of the assessment order. 23. In the present case, it is an admitted position that the assessment orders are totally silent about the AO having written to the Additional CIT seeking his approval or of the Additional CIT having granted such approval. Interestingly, the assessment orders were passed on 30th December 2010 without mentioning the above fact. These two orders were therefore not in compliance with the requirement spelt out in para 9 of the Manual of Official Procedure. 24. The above manual is meant as a guideline to the AOs. Since it was issued by the CBDT, the powers for issuing such guidelines can be traced to Section 119 of the Act. It has been held in a series of judgments that the instructions under Section 119 of the Act are certainly binding on the Department. In Commissioner of Customs v. Indian Oil Corporation Ltd. (2004) 165 ELT 257 (S.C.) the Supreme Court observed as under: "Despite the categorical language of the clarification by the Constitution Bench, the issue was again sought to be raised before a Bench of three Judges in Central Board of Central Excise, Vadodara v. Dhiren Chemicals Industries: (2002) 143 ELT 19 where the view of the Constitution Bench regarding the binding nature of circulars issued under Section 37B of

5 ITA No. 745/Jodh/2025 Asst. Year: 2017-18 the Central Excise Act, 1944 was reiterated after it was drawn to the attention of the Court by the Revenue that there were in fact circulars issued by the Central Board of Excise and Customs which gave a different interpretation to the phrase as interpreted by the Constitution Bench. The same view has also been taken in Simplex Castings Ltd. v. Commissioner of Customs, Vishakhapatnam (2003) 5 SCC 528. The principles laid down by all these decisions are: (1) Although a circular is not binding on a Court or an assessee, it is not open to the Revenue to raise the contention that is contrary to a binding circular by the Board. When a circular remains in operation, the Revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute. (2) Despite the decision of this Court, the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. (3) A show cause notice and demand contrary to existing circulars of the Board are ab initio bad. (4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars." For all of the aforementioned reasons, the Court finds that the ITAT has correctly set out the legal position while holding that the requirement of prior approval of the superior officer before an order of assessment or reassessment is passed pursuant to a search operation is a mandatory requirement of Section 153D of the Act and that such approval is not meant to be given mechanically. The Court also concurs with the finding of the ITAT that in the present cases such approval was granted mechanically without application of mind by the Additional CIT resulting in vitiating the assessment orders themselves.”

6 ITA No. 745/Jodh/2025 Asst. Year: 2017-18 "22. As rightly pointed out by learned counsel for the assessee there is not even a token mention of the draft orders having been perused by the Additional CIT. The letter simply grants an approval. In other words even the bare minimum requirement of the approving authority having to indicate what the thought process involved was is missing in the aforementioned approval order. While elaborate reasons need not be given, there has to be some indication that the approving authority has examined the draft orders and finds that it meets the requirement of the law. As explained in the above cases the mere repeating of the words of the statute, or mere rubber stamping of the letter seeking sanction by using similar words like see or approved will not satisfied the requirement of law." We further find that in the case of Pr. Commissioner of Income Tax -15 v. Shiv Kumar Nayyar the Hon'ble Delhi High Court held that: "17" Notable, the order of approval dated 30-12-2020 which was produced before us by the learned counsel for the assessee clearly signifies that a single approval has been granted for AYs 2011-12 to 2017- 18 in the case of the assessee. The said order also fail to make any mention of the fact that the draft assessment orders were perused at all, much less perusal of the same with an independent application of mind. Also, we cannot lose sight of the fact that in the instant case, the concerned authority has granted approval for 43 cases in a single day which is evident from the findings of the ITAT, succinctly encapsulated in the order. We observe that learned Assessing Officer had sought the prescribed authority's approval on 20.12.2011 which stood granted on 21.12.2011. The sole issue is that the learned Assessing Officer herein had infact sought a common approval for the assessment years from 2004-05 ΤΟ 2010-11 which stood granted, and therefore, we quote PCIT Vs. Shiv Kumar Nayyar (2024) 163 taxmann.com 9 (Bel.), PCIT Vs. MDLR Hotels (P) Ltd. (2024) 166 taxmann.com 327 (Del.) and ACIT vs. Serajuddin and Co. (2024) 163 taxmann.com 118 (SC), to conclude that such a combined section 153D approval indeed vitiates the entire assessment itself. We draw strong support therefrom to quash all the impugned assessments framed herein in assessee's case in assessment years 2004-05 to 2010-11 in very terms.”

7 ITA No. 745/Jodh/2025 Asst. Year: 2017-18 the competent authority, who issued the approval and also granted approval for seven cases in single day and it clearly lacks of thought process which is essentially for a valid approval that competent authority entered into thought process and after application of mind he issued the same and mechanical approval issued in the mechanical way is not permissible in the eye of law and thus, we find that there is material substance in the submissions advanced on behalf of the assessee/appellant as approval in question is of mechanical and without application of mind and lacks sufficient thoughtful process and resultantly assessment order valid by such approval lacks legitimacy and termed as non-est and null and void and liable to be quashed. 9. Rest of the grounds are interrelated to each other and hence do not require any specific adjudication. 10. Consequently, the appeal is allowed as stated above.

Order pronounced on 29/07/2026 under Rule 34(4), in accordance with the ITAT Rules, 1963. Sd/- Sd/- (DR. MITHA LAL MEENA) (SUDHIR PAREEK) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 29/07/2026.

8 ITA No. 745/Jodh/2025 Asst. Year: 2017-18 Nimisha Sr. PS True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER,